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High Court Of Madhya Pradesh
P. D. MULYE, R. K. VARMA
PATHARIBAI - Appellant
Versus
FIRULALJI SHANKALAL - Respondents
Misc. Appeal 153 Of 1981
Decided On : 12/01/1984
MOTOR VEHICLES ACT - INSURANCE - LIABILITY - TRANSFER OF OWNERSHIP - CONTRACT OF EMPLOYMENT - COVERAGE OF RISK: 1. Where an agreement to sell a truck is entered into, but the full consideration is to be paid within three months and the registration of the vehicle is to be transferred only on such completed sale, the ownership of the truck remains with the owner on the date of the accident. 2. An insurance company cannot avoid liability under its contract of insurance with the owner of a vehicle on the ground that the ownership of the vehicle had been transferred to another person, where the transfer of ownership was not completed and the insurance company was not informed about the transfer. 3. A passenger carried in a motor vehicle by reason of or in pursuance of a contract of employment is covered by the insurance policy under S. 95(1)(b) proviso (ii) of the Motor Vehicles Act, 1939, even if the contract of employment is not with the insured owner of the vehicle. 4. The risk to body or life of a person who is not a gratuitous passenger but is under an obligation to travel on the insured vehicle by reason of or in pursuance of contract of employment should be covered by insurance.
Fact of the Case:
The deceased, Karansingh, was a laborer employed by Thakur Sawdekar and Co. to lift and load bags of Temroo leaves on a truck. The truck met with an accident, resulting in the death of Karansingh. The Motor Accident Claims Tribunal awarded compensation to the claimants, the legal heirs of Karansingh. The owner of the truck, M/s. Lalji Shankarlal, and the insurance company, New India General Insurance Company, appealed against the award.
Finding of the Court:
The court found that the agreement to sell the truck was not a completed sale and that the ownership of the truck remained with the owner on the date of the accident. The court also found that the deceased was a passenger carried in the motor vehicle by reason of or in pursuance of a contract of employment and was therefore covered by the insurance policy under S. 95(1)(b) proviso (ii) of the Motor Vehicles Act, 1939.
Issues: 1. Whether the transfer of ownership of the truck was completed before the date of the accident. 2. Whether the insurance company was liable to pay compensation under the insurance policy. 3. Whether the deceased was covered by the insurance policy under S. 95(1)(b) proviso (ii) of the Motor Vehicles Act, 1939.
Ratio Decidendi: 1. An agreement to sell a vehicle is not a completed sale until the full consideration is paid and the registration of the vehicle is transferred to the buyer. 2. An insurance company cannot avoid liability under its contract of insurance with the owner of a vehicle on the ground that the ownership of the vehicle had been transferred to another person, where the transfer of ownership was not completed and the insurance company was not informed about the transfer. 3. A passenger carried in a motor vehicle by reason of or in pursuance of a contract of employment is covered by the insurance policy under S. 95(1)(b) proviso (ii) of the Motor Vehicles Act, 1939, even if the contract of employment is not with the insured owner of the vehicle.
Final Decision: The court partly allowed the appeal and modified the award passed by the Motor Accident Claims Tribunal. The court directed that the amount of compensation as determined by the learned Tribunal as compensation payable to the claimants-heirs of the deceased shall be paid by the respondent No. 5. Insurance company also together with interest at the rate of 6% per annum from 20-7-1977 the date of filing the claim petition before the Tribunal.
( 1 ) THIS order shall also govern the disposal of Misc. Appeal No. 179 of 1981 (M/s. Lalji Shankarlal v. Smt. Pathribai and others ).
( 2 ) THIS is an appeal filed by claimants against the Award dated 21-2-1981 made by the Motor Accident Claims Tribunal, Dewas praying for enhancement of the compensation amount awarded. Another appeal Misc. Appeal No. 179 of 1981 has been filed by M/s. Lalji Shankar, who is joined in the present appeal as respondent No. 1 being the owner of the truck, against whom an award of Rs. 20,000/- has been passed in favour of the claimants, legal heirs of deceased Karanangh who died as a result of the motor-truck accident.
( 3 ) THE facts leading to this appeal briefly stated are as follows :-truck No. MPO 1994, on the date of the accident i. e. 15-6-1977, was carrying deceased Karansingh, a labourer (Hammal) along with other labourers (Hammals) employed by Thakur Sawdekar and Co. , Khategaon respondent No. 4 to Nasrullaganj to lift bags of Temproo leaves on the truck for bringing the same to Khategaon. The truck met with an accident on the way by colliding with a tree resulting in injuries to the Hammals and ultimate death of deceased Hammal Karanshinh. The driver of the truck at the time of accident was Babukhan, Respondent No. 2. The truck was insured with New India General Insurance Company, Indore respondent No. 5, by respondent No. 1. The Claims Tribunal found the negligence of the driver and awarded a compensation of Rs. 20,000/- to the claimants. The insurer respondent No. 5 was, however, absolved of its liability on a finding that the insured respondent No. 1 had sold the truck to respondent No. 2 under an IKRARNAMA (Ex. 5 D-4) on 31-5-1977, prior to the date of the accident but the Tribunal gave the award against the respondent No. 1 M/s. Lalji Shankarlal.
( 4 ) IT is obvious that the Tribunal having found that the truck had been sold by respondent No. 1 prior to the date of accident, the award could not have been given against the respondent No. 1 logically. However, it has been the case of the respondent No. 1 before the Tribunal that the agreement to sell (IRKARNAMA Ex. 5 D-4), dated 31-5-1977 had been subsequently cancelled before the date of accident vide Ex. D-l dated 13-6-1977 (KARAR NIRASTI-KARANA LEKHA ). As such the respondent No. 1 M/s. Lalji Shankarlal has filed the connected appeal Misc. Appeal No. 179 of 1981 contending that the Insurance Company is liable to pay compensation.
( 5 ) THE learned Tribunal held that the deceased Karansingh and Kewelram etc. had gone on the truck on the date of accident to do the work (of lifting and loading of bags of Temroo leaves on the truck) for respondent No. 4 Thakur Sawdekar and Co. and as such they can be regarded to be in their employment. A partner of respondent No. 4, named Shriniwas stated as N. A. W-l, that hammals including the deceased were employed as Hammals on contract basis and that wages were paid to Kewalram and his companion hammals on piece rate basis i. e. per bag load of Temroo leaves lifted and loaded.
( 6 ) THE main controversy in this appeal is with regard to the two contentions of the Insurance Company which have apparently been accepted in the findings of the learned Tribunal. The first contention is that the owner of the truck, (respondent No. 1) had sold the truck to the driver-respondent No. 2 before the date of the accident and consequently the Insurance policy in favour of respondent No. 1 had lapsed and did not subsist on the date of the accident and, therefore, the Insurance company was automatically absolved of its liability under the insurance contract which was with respondent No. 1 who no more remained the owner on the date of the accident. The second contention is that the deceased Karansingh, a labourer (Hammal), being not the employee of the insured owner of the truck, the Insurance Company was not liable in respect of death of such an employee under the Insurance policy or the provisions
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